STAND. COM. REP. NO.1364

Honolulu, Hawaii

, 2001

RE: H.B. No. 584

H.D. 2

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 584, H.D. 2, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ESCROW DEPOSITORIES,"

begs leave to report as follows:

The purpose of this measure is to clarify certain provisions of the escrow depository law.

Specifically, this bill:

(1) Clarifies procedures for closing branch offices and voluntary termination of escrow depository operations;

(2) Establishes statutory authority regarding confidential portions of application or records; and

(3) Authorizes the Commissioner of Financial Institutions to establish fees by administrative rule.

Your Committee has amended this bill to incorporate provisions to protect escrow customers as offered by the Commissioner of Financial Institutions of the Department of Commerce and Consumer Affairs. These amendments:

(1) Specify that an escrow licensee may deposit moneys held only in sweep accounts, checking accounts, money market deposit accounts, and savings accounts with no specified maturity date;

(2) Require that licensees using sweep accounts have a net worth less than $1,000,000;

(3) Define sweep accounts;

(4) Establish licensee liability for moneys transferred under sweep accounts; and

(5) Clarify that earnings on funds held in escrow that accrue to the purchaser are not limited to interest earnings.

Additionally, your Committee has amended this bill to require that an escrow depository provide notice of termination of escrow operations to buyers and sellers at least twenty days prior to termination.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 584, H.D. 2, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 584, H.D. 2, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair